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SHG Member as Business Correspondents:Issues and Modalities in Post PMJDY Scenario


Affiliations
1 CRFIM, BIRD, Lucknow, India
2 CRFIM – BIRD, Lucknow, India
3 BIRD, Lucknow, India
     

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India made several efforts towards achieving financial inclusion in order to increase the reach of banking services to every nook and corner of the country. Introduction of Business Correspondents (BC) in 2006 and the introduction of Self-Help Group (SHG) members as BC (SHG-BC) in 2012 is another milestone in this direction. Centre for Research in Financial Inclusion and Microfinance (CRFIM) conducted a study to examine the financial viability of the SHG-BC model. It also examined the issues and modalities required for the proper functioning of SHG member as BC. It attempted to understand the policy and implementation requisites for improving the business prospects of BCs.

The SHG-BC approach is comparatively new and adopted by a limited number of Regional Rural Banks (RRBs). Banks engaging BCs may, therefore, need to work out a viable business model for BCs and integrate it with their overall business policies. This will not only help improve the banking business, but also extend the banking facilities to the poorest of the poor through the SHG movement.


Keywords

Business Correspondents, Self-Help Groups.
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  • Beck, T, A Demirguc-Kunt and P Honohan (2009): “Access to Financial Services: Measurement, Impact, and Policies”, The World Bank Research Observer, Vol 24, No 1, pp 119-145.

  • Khan, H R (2012): “Issues and Challenges in Financial Inclusion: Policies, Partnerships, Processes & Products”, Keynote address on “Financial inclusion in Indian Economy” organised by the Indian Institute of Public Administration, Bhubaneswar.

  • Molyneux, Philip (2007): “Specific Economic Gains” in Luisa Anderloni, Maria Debora Braga and Emanuele Maria Carluccio (ed.), New Frontiers in Banking Services, Springer, Heidelberg.

  • Reserve Bank of India (2015), Report of the Committee on Medium-term Path on Financial Inclusion, RBI, Mumbai.

  • Sharma, Manoj, Anurodh Giri and Sakshi Chadha (2016): Pradhan Mantri Jan Dhan Yojana (PMJDY), Wave III Assessment – Micro Save, 2016.


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  • SHG Member as Business Correspondents:Issues and Modalities in Post PMJDY Scenario

Abstract Views: 266  |  PDF Views: 2

Authors

Yogesh Bandhu
CRFIM, BIRD, Lucknow, India
Dhirendra Kumar
CRFIM – BIRD, Lucknow, India
D. V. Deshpande
BIRD, Lucknow, India

Abstract


India made several efforts towards achieving financial inclusion in order to increase the reach of banking services to every nook and corner of the country. Introduction of Business Correspondents (BC) in 2006 and the introduction of Self-Help Group (SHG) members as BC (SHG-BC) in 2012 is another milestone in this direction. Centre for Research in Financial Inclusion and Microfinance (CRFIM) conducted a study to examine the financial viability of the SHG-BC model. It also examined the issues and modalities required for the proper functioning of SHG member as BC. It attempted to understand the policy and implementation requisites for improving the business prospects of BCs.

The SHG-BC approach is comparatively new and adopted by a limited number of Regional Rural Banks (RRBs). Banks engaging BCs may, therefore, need to work out a viable business model for BCs and integrate it with their overall business policies. This will not only help improve the banking business, but also extend the banking facilities to the poorest of the poor through the SHG movement.


Keywords


Business Correspondents, Self-Help Groups.

References